March 22, 2007

EVEN LIZZIE BORDEN PUT DOWN THE AXE EVENTUALLY:,0,3711224.story?track=ntottext>The Fed eases its stance on rates: Policymakers hold a benchmark for interest costs steady, but hopes rise for cuts this year (Molly Hennessy-Fiske, March 22, 2007, LA Times)

The Federal Reserve on Wednesday suggested it had softened its disposition toward raising interest rates, boosting hopes for rate cuts this year that could spur growth and ease housing woes.

While leaving its benchmark short-term rate unchanged at 5.25% as expected, the Fed referred to "future policy adjustments" without specifying possible rate increases as it has done in the past. That indicated the central bank had adopted a more neutral stance -- and was not leaning toward raising rates as much as before, analysts said.

Investors hoping for rate cuts were cheered. The Dow Jones industrial average, flat prior to the announcement, rallied sharply on the news, posting a gain of nearly 160 points -- its biggest of the year.

Posted by Orrin Judd at March 22, 2007 7:37 AM
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